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BISMARCK—North Dakota’s economy continues to soar and bucks the national trend of lackluster consumer spending, the state’s tax commissioner said today.

During April, May, and June, retail sales grew to $4.5 billion, driving a combined growth of over $1 billion for all 15 industry sectors in total taxable sales and purchases compared to the same months in 2010.

“North Dakota experienced a remarkable second quarter for taxable sales and purchases,” Tax Commissioner Cory Fong said in a statement. “Even with the onset of statewide historic flooding during the second quarter, North Dakota’s economy continued to grow and consumer confidence remained strong, bucking the national trend of lackluster consumer spending.”

Twelve of the 15 major sectors reported gains when compared to the same time one year ago, a news release from the Tax Department said.

The wholesale trade sector grew by 51.1 percent, representing the largest dollar increase of $410 million. The financial, insurance, real estate, rental and leasing sector reported the largest percentage of growth of the major sectors, rising by 116.4 percent when compared to the second quarter of 2010, the release said.

“While living in a rural area of North Dakota, I have heard rumors of farm families who lost loved ones in our nation’s wars and who then quit cooperating with the government. Specifically, they quit paying income tax or even filing. Does North Dakota’s state tax commissioner have a formal policy dealing with such an unfortunate protest and how common is this reaction?”

Thanks for writing! I contacted Tax Commissioner Cory Fong. Nathan Bergman, supervisor of the Individual Income Tax Section, and public information officer Beth Boustead also contributed to the response.

“In North Dakota, we have laws set out in the North Dakota Century Code 57-38, which specifically address the North Dakota income tax, including identifying the type of income that is taxable. And it is the duty, by statute, of the Office of State Tax Commissioner to enforce these tax laws.

“To answer the question you posed, even though North Dakotans are known for their honesty and integrity, it is possible that there are individuals who, for some reason, feel they do not need to comply with North Dakota’s tax laws.

“The Tax Department does have in place a system for identifying taxpayers who are in non-compliance. In some instances, it is through information received from an outside source. In other instances, it is through an internal cross-check.

“My point is that those individuals who do not comply with the tax laws in North Dakota will likely be discovered. When that happens, there are penalties and other fees that may be added to the amount of tax owed. That will significantly increase the total amount that is due.

“That is why I encourage individuals to contact the Tax Department if they are experiencing a situation that will affect their ability to pay the tax due.

“Our mission is to fairly and effectively administer North Dakota’s tax laws. In doing so, we apply these tax laws uniformly to all residents and taxpayers. If an individual is experiencing financial hardship, such as a result of the loss of a loved one, they should contact the Tax Department to determine what we can do to work with them through their situation.

“While we cannot release them from their tax obligations, it is possible that some payment plan could be arranged.

“In the last year, we have contacted over 1,000 individuals who had income from North Dakota and failed to file a return. The vast majority of these are individuals who failed to file for a variety of reasons and only a small fraction are individuals who might fall into the ‘tax protestor’ category.

“Again, thank you for contacting us with your question. I hope this information is helpful.”

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

I briefly ran out of your questions, so I asked a question of my own this week. I’ll return to your questions soon, now that I have several again.

With the recent interest in presidents and their vacations, I decided to look at vacation time used by North Dakota elected officials.

I started with Office of Management and Budget Director Pam Sharp. She said elected officials are free to set their schedules and days off. They do not report annual leave hours or sick leave.

From there, I contacted several elected officials to ask how much vacation time they take. Here’s how they responded:

Attorney General Wayne Stenehjem

How many days off have you taken this year?

Annual leave: 9 days. Funeral Leave: 4 days. Sick leave: 0 days.

How many days off did you take in 2010?

Annual leave: 9 days. Sick leave: 0 days.

How do you go about determining how many days off you take each year?

“I have no set policy for taking time off, but coordinate vacation days with my wife’s schedule.

“The ‘annual leave’ days are for days taken off during the regular work week. It does not count weekend and evening work that is always a part of the job, which would more than exceed the annual leave days taken.

“For comparison purposes, after 10 years of employment, state employees are entitled to 18 days of vacation per year.”

Gov. Jack Dalrymple

Since becoming governor on Dec. 7, Dalrymple has taken 5½ days off, spokesman Jeff Zent said. Records of his schedule from 2010, when he was lieutenant governor, have been purged from the system and are no longer available, Zent said.

As governor, Dalrymple has worked weekends and holidays totaling 15 days, Zent said. That includes only public meetings and events, not his personal time attending to state business, he said.

Insurance Commissioner Adam Hamm

How many days off have you taken this year?

Nine. This included the week he spent with his kids before they started school this year and with their new Great Dane puppy. As for sick days, he said there’s usually a day or two each year when he’s not in the office.

How many days off did you take in 2010?

Eleven, including family trips to Mount Rushmore and Disney World (eight of those 11 days were on these trips).

How do you go about determining how many days off you take each year?

“I do my best to try to find some quality time to spend with my wife and kids (age 13 and 10) each year. Most often it’s during the summer. It all depends on my schedule and their schedules regarding when I can take a few days off to spend time with them.”

Ag Commissioner Doug Goehring

How many days off have you taken this year?

Vacation: One half day in April. Sick days: None.

How many days off did you take in 2010?

Vacation: One long weekend to include a Friday and Monday in May. Sick days: None.

How do you go about determining how many days off you take each year?

“There is a lot of work to do in the Ag Department. I feel if I am asked to attend a meeting … there is an expectation for me to attend. I haven’t taken one complete day away from the office in the last year.

“I have planned on taking vacations, at the very least a long weekend, but I usually end up canceling my plans.

“I wouldn’t mind taking some time away from the office, but I haven’t found a time when vacation days are compatible with my work schedule. I would like to take some time off at the end of this year.”

Superintendent of Public Instruction Wayne Sanstead

Sanstead said he doesn’t record the days he takes off. However, he said he’d have a “fair amount of time coming” if he could build up paid time off like other workers.

He said he missed some days last year when his wife had health problems, and he takes off for the occasional cold. He will also try to take a weekday off if he works during the weekend.

The only time he can recall taking a full week off was to go on a cruise with his wife for their 50th wedding anniversary four years ago.

It’s a matter of decision-making and being responsible, he said.

“It’s a leadership role after all. People are going to notice if you’re gone all the time, I think,” Sanstead said. “I think people pay attention, understandably so.”

Tax Commissioner Cory Fong

Like Sanstead, Fong doesn’t keep official track of days off. However, he provided estimates.

How many days off have you taken this year?

5.5 days of vacation time and just over a day of sick leave.

How many days off did you take in 2010?

I took just under 7.5 days of vacation and 3.25 days of sick leave.

How do you go about determining how many days off you take each year?

“I look at the work load with which I am dealing, the issues that are being handled – as well as those that are on the horizon, i.e. upcoming legislative hearings during this interim – and the coverage (of) members of the management team during the time I am planning to be out of the office. Ultimately, though, I need to be available as much as possible and to the extent practical for all taxpayers and residents.”

I also asked the elected officials if they think there should be a set policy for their vacation time or if the current system works. The general consensus was they typically work more than 40-hour weeks, and the current system of determining their own amount of time off works.

“We are expected to work as many hours as it takes to get the job done,” Goehring said.

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

In North Dakota, if three siblings, A, B and C, are tenants in common of a section of land, can A and B sell their “shares” to person C without tax penalty to person C? Or does the entire section have to be sold, then repurchased by person C? And in the second case, what tax liability would C incur?

Roberta Lucio

Enderlin

Thanks for writing! I contacted Tax Commissioner Cory Fong. Here’s what he said:

“The questions you are posing do not simply impact North Dakota income tax. There is also a federal income tax component to be considered. Given the vagueness of the scenario, my suggestion to you is that a more fruitful discussion on this particular topic could be had with a real estate attorney and/or a tax professional.

“In North Dakota, in situations where property is owned by two or more persons – considered as tenants in common – each tenant owns an undivided share of the property. The shares do not have to be equal.

“If we assume that this is a very straightforward transaction, absent any restriction agreed upon by the tenants, each tenant may sell, exchange, give away or otherwise deal with his or her respective interest in the property (e.g., mortgage it) just like any other property interest.

“Given the above, A and B may sell their respective shares of the property to C. Any federal income tax implication, i.e., a gain or loss on the sale, will fall on A and B as the sellers.

“As the buyer, C would not incur any federal income tax consequence simply from purchasing the others’ interests in the property. (C would become the sole owner of the property and would have to deal with any federal income tax implications only at such time as C disposes of the property.)

“As to the last two questions regarding the sale of the entire section of land with the repurchase of it by C, that course shouldn’t be necessary if all three tenants are in agreement on the sale of A’s and B’s respective interests to C.

“There are legal recourses that tenants in common may have in cases where there is not complete agreement, such as a dispute over the sales price (value) of the property interests, one of which may involve a court-ordered sale of the entire property with a distribution of the proceeds among the tenants.

“In this type of situation, the federal income tax implications, if any, for A, B, and/or C would depend on what actually takes place.

“Again, given the nature of the questions, which involve not only federal income tax law implications but also call into play property laws, I believe it may be very productive for you to visit with a real estate attorney and/or tax professional.”

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

In the Jamestown Sun … The AP had an article on Internet sales and lost tax revenue for the states who are feeling an economic pinch. Amazon and others are mentioned, which raised my eyebrows. Over the years, including this one, I have ordered items from Amazon, Barnes and Noble, Sears and others.

As I recall, the ONLY time a North Dakota state tax was NOT included (as a line item) was a camera purchase from B & H Photo in New York. The rule, as I understood it, was if they had a physical presence in our state, sales tax was mandatory. This raises my curiosity: was the tax charge a clever revenue enhancement?

Do you know if our state tax commissioner actually receives the tax collected from Internet sales? Does he have a list of companies who do collect it and send to the state?

Robert M. Brown

Jamestown

Thanks for writing! I contacted Tax Commissioner Cory Fong. Here’s what he said:

“Your understanding of the rule is correct. Retailers that have a physical presence in North Dakota are required by law to register and collect our sales taxes. Even though Internet sellers that do not have a physical presence in North Dakota are not required to collect our tax, we do have some that do voluntarily register, collect and remit sales taxes to our office.

“The sales tax statutes have confidentiality provisions that prohibit the state Tax Department from disclosing information about sales tax accounts. Because of those provisions, we cannot provide a list of Internet sellers that do or do not collect our taxes.

“Retailers that must collect tax are required to register with our office, and we issue a sales tax permit to all companies that complete the registration process. State laws require retailers to display the permit so customers can verify the retailer is authorized to collect tax. Unfortunately, displaying a permit is not effective for a remote business that operates outside the customer’s home state.

“You do have the right to ask a retailer if they have a valid North Dakota sales tax permit number. Sales tax permit numbers can be verified on our website. To verify a permit, go here.

“If you enter a valid permit number in the search, the response will tell you the number is valid and the name of the registered retailer.

“I’m sorry we cannot be more direct regarding specific retailers. I hope this information is helpful in response to your questions.”

Do you have a question for a North Dakota state government official or agency? Send us your question, and we’ll do our best to find an answer.

BISMARCK â€“Â Low-income senior citizens and disabled personsÂ may be able to receive a refund for part of their rentÂ money, Tax Commissioner Cory FongÂ said in a news release today.

The deadline for filing for the refund is May 31.

The Renterâ€™s Refund program is part of the Homestead Credit for Senior Citizens or Disabled Persons that the state Tax Department administers. The refund program is available to low-income renters who are 65 or older or permanently and totally disabled. Mobile home residents may also be eligible for a refund of part of the lot rent they paid, the news release said.

â€œThis is an important program, especially for those who need it most â€“ the low-income, elderly and disabled â€“ those individuals who might be having a hard time meeting basic living expenses like electricity, heat and food,â€ Fong said in a statement.

In addition to the age or disability status and income criteria, there are certain other eligibility requirements for the renter refund.Â To qualify for the program, a renterâ€™s 2010 income cannot exceed $26,000. If 20 percent of the total amount of rent paid is more than 4 percent of their 2010 income, they could be eligible for a refund. The maximum refund amount is $400.

Anyone who thinks they might be eligible should contact the Tax Department and request an application. Call (701) 328-3127 or (877)328-7088 option 6 for more information.

BISMARCKâ€”North Dakota taxable sales and purchases were up $863 million, or 28 percent, during the summer months compared to the same time last year.

Tax Commissioner Cory Fong released the third quarter results Thursday, showing taxable sales and purchases during July, August and September were $3.947 billion.

â€œThis is a positive report for North Dakota showing continued growth across the state and across most industry sectors,â€ Fong said in a statement. â€œNorth Dakotaâ€™s retail trade continued to show strength, and our businesses continue investing and building up inventory levels, in contrast to the national reports of a slow economic recovery.â€

Retail trade, often looked to as a measurement of consumer confidence, reported a gain of 7.7 percent compared to the same period for 2009. Inflation during the same time was 1.2 percent.

Thirteen of 15 industry sectors reported growth during the third quarter, a news release said.

The wholesale trade sector had the largest growth in terms of dollars, growing $333 million, while the mining and oil extraction sector experienced the largest percentage of growth, increasing by 193.7 percent.

Of the 50 largest cities, the largest percentage decreases for the third quarter were Cavalier, down 40.7 percent; Park River, 22.3 percent; Ellendale, 20.8 percent; Cando 16.9 percent; and Walhalla, 10.1 percent.

BISMARCKâ€”North Dakota’s oil industry helped boostÂ the state to a 14.6 percent increase inÂ taxable sales and purchasesÂ this spring.

Tax Commissioner Cory Fong released a key economic report today that says taxable sales and purchases were $3.416 billion during April, May and June compared to $2.982 billion during the same months last year.

â€œThese figures are very encouraging, especially when you consider the continued impact of the national economic recession on the majority of the states,â€ Fong said in a statement.

Comparing second quarter 2010 to second quarter 2009, growth was fueled by the mining and oil extraction sector, which grew 98 percent, a news release said.

Counties with the highest percentage increases were Burke County, 110.2 percent; Williams County, 97.8 percent; McKenzie County, 50.8 percent; Stark County, 31.8 percent; and Bowman County, 29.3 percent.Â

The counties with the biggest percentage decreases were Logan County, down 34.3 percent; Oliver County, 26.1 percent; Grant County, 16.8 percent; Griggs County, 16.3 percent; and Emmons County, 13 percent.

More information can be found at www.nd.gov/tax/salesanduse/pubs/reports/2010-2-stat-report.pdf.

Here’s what the Tax Commissioner’s Office just released in regard to the news conference they had this morning. I was unable to go due to my work on another project. The AP should have a story soon.

Fong Working with Legislators in Response to Federal Tax Increases Â BISMARCK, N.D. â€“ Tax Commissioner Cory Fong announced today that he is working with state legislators on legislation to address the anticipated impact of the expiration of the Bush tax cuts.Â

â€œWe are preparing to introduce legislation during the 2011 legislative session to ensure North Dakota taxpayers are not subject to additional state income taxes that would result if certain provisions of the Bush tax cuts expire,â€ said Fong.

Currently, the standard deduction for married filers who file a joint return is twice that of the standard deduction for single filers, which creates parity between the two filing statuses.Â This provision, which eliminated some of the penalty associated with filing a married joint return, is set to expire unless Congress takes action to extend it.Â

Should it expire, the standard deduction for married filers would once again penalize married filers who file a joint return.

â€œWeâ€™ve worked tirelessly in the last two legislative sessions to provide meaningful and substantive tax relief to our citizens, reducing the burden on our North Dakota families, businesses, and farmers and ranchers,â€ said Fong.Â â€œThis is not the time to sit back and allow North Dakotans to be taxed any more just because of the action, or inaction, of Congress.â€

According to Tax Department analysis, once the standard deduction provision for married filers expires, more than 83,000 North Dakota taxpayers would see an increase in their federal taxable income.Â The result would be an increase in their federal and state income taxes.

â€œThe legislation we are working on aims to protect North Dakota taxpayers from paying more into the state coffers because of Washingtonâ€™s actions,â€ said Representative Mike Nathe of Bismarck.

Senator Dwight Cook, Mandan, and Representative Wes Belter, Cass County, Chairmen of the Senate and House Finance and Taxation Committees, added that this legislation could also serve as a vehicle for other possible legislative changes that may be necessary to ensure that North Dakota taxpayers do not see increases in their state income taxes resulting from Congressional actions.

â€œThere may be other legislative changes to consider, depending on what Congress does or doesnâ€™t do,â€ said Cook. â€œItâ€™s important that we are prepared and have legislation ready to go that will safeguard our stateâ€™s taxpayers,â€ said Belter.

If Congress does not extend the standard deduction provision of the soon-to-expire Bush tax cuts, there is a direct impact on taxpayersâ€™ state income tax liabilities and on the stateâ€™s tax revenues.Â Married couples filing joint returns could see an increase in their state income tax of up to $94 per year.Â

The overall fiscal impact to the state would be an increase of approximately $6.7 million per biennium in additional tax revenue.Â According to Fong, the group anticipates introducing legislation at the beginning of the 2011 legislative session.